Marijuana Business Magazine - January 2017

HOWTO PAY YOUR SALEPERSON people share challenges and the solu- tions they’ve developed. Wu also recognizes that training is vitally important to the success of his sales team. In recent years, Kush Bottles has invested more money into training its staff. “We invest a lot in training our sales- people to get them up to speed,” Wu Y ou need to pay your salespeople the right mix of salary and com- mission to ensure they can cover their car payments, rent and other expenses – yet stay motivated enough to go out and make or exceed their quotas. Mark Friedman – director of sales and marketing for MedPharm Hold- ings, a provider of cannabis-based pharmaceutical products – pays a new hire a salary of $30,000 or $40,000 a year, plus commission. This structure gives his salespeople enough to cover their personal expenses but remain hungry to earn a decent commission. He’s looking for someone with at least two years of outside sales experience or two to three years in the hospitality field. The pay structure starts as 50% salary and 50% commission, which Friedman expects will turn into 35% and 65%, respectively, “because they’re going to be such great salespeople they’re going to make a lot of commission.” He also helpswith cellphone, mileage, business travel and entertainment. Dr. AndrewKerklaan – president and founder of Dr. Kerklaan Therapeu- tics, a medical marijuana topicals company – declined to divulge what he pays his sales representatives. But he did say it’s salary plus commission. “As opposed to merely throwing them out there with commission only,” he said. He recognizes that his company is based in the San Francisco BayArea, one of the most expensive areas in the nation, so he needs to keep his sales reps’ salaries competitive with the rest of the region. Ben Wu, president and chief operating officer of the packaging and supplies company Kush Bottles, also declined to give specific numbers. But he did say his salespeople “have unlimited earning potential.” He tells them that any salesperson at Kush Bottles can make more money than anyone in the company, even the CEO. “We’d be happy for you to make money,” he said. Pay structure at his company is part salary, part commission. “We want to incentivize our staff to grow as much as possible,” he said. “This is a new industry, so we don’t want people to worry about paying their rent while they get up to speed.” — Bart Schaneman said. “We want that sense of urgency, but we don’t want to throw them into the fire and watch them flounder.” During training, Wu emphasizes to his sales team the necessity of focus- ing on compliance, given its importance within the cannabis industry. He tells them that not adhering to compliance standards could jeopardize the entire operation. HOW TO MANAGE Kerklaan’s company is expanding – with products in about 40 dispen- saries in California – so he’s very involved with the day-to-day sales activities as the business grows. “We’re in the early days here, so I’m still pretty hands-on,” he said. “I like to be interacting a lot with (the sales reps).” He receives official sales reports via email. “But I like the personal update through text or phone call to share the win, to check in,” Kerklaan added. Friedman considers himself more of a coach than a manager. “I’m not a micromanager,” he said. “I don’t need to know where they are every moment of the day. But I do want them planned and focused on what they have do that day.” Friedman does communicate with his salespeople closely. He expects to see a salesperson’s schedule for the day in his inbox by 9 a.m. He reviews it to see what the rep wants to get out of the market – for example, what each individual’s sales goals are for the day. At the end of the day, he asks: “How did it go today? What were your strug- gles? What can I do to help you?” Wu uses the quota system with his salesforce. He isn’t only evaluating how much money a salesperson is bringing in, but he also notices any revenue-driven activities, such as networking with clients, site visits and seeking out new customers. The sales staff submits reports he can review. Wu also monitors how quickly his reps follow up with clients. His staff uses an integrated CRM system that provides visibility on sales rep activ- ity. Having that visibility on sales activity and follow-up is critical for any organization, Wu said. “Ultimately, we’re a metric-driven company,” he said. “You have to meas- ure yourself with metrics.” ◆ 94 • Marijuana Business Magazine • January 2018